Investment

[The Grey Blur]

You always hear people saying "we need to attract more foreign companies/investors, let's lower the corporate tax rate here." I disagree with this but where I live there is a pretty high rate of unemployment and people are desperate enough for the jobs that the shitty pay and exploitation is ignored.

What is a socialist critique of this?

And lol hi, I've been away for a while thinking about stuff and being lazy :lol:

[The Grey Blur]

Lol you can all debate about what Lenin ate for breakfast but noone can give an answer on a socialist dilemma nowadays? ;)

[Coggeh]

Firstly, it was an undercooked egg i tell you !

Not really a socialist critique but an economical one ... i suppose

Well lowing corporation taxes creates a sudden race to the bottom of competing countries in terms of taxation and when Ireland did this making it 12.5% instead of the EU average of 33% or something it was an immense policy mistake as you have countries Like Estonia handing out a zero rate to many if not all Foreign companies .

By lowering corporation tax you only create a haven for companies and that only have a small benefit on the country when tax is so low , when it becomes cheaper to move your industry somewhere else it will have and your economy would have gained close to none long term real benefits .

For example Health care and Education in Ireland have only gone backwards in light of "Celtic Tiger" and now that its well and truly over it proves that Low corporation Tax helps the Country in no long term way .Only recently have the government decided to cut the health budget ...again in the light of our creaking economy .

http://www.socialistparty.net/pub/pages/th...ist028sep07.htm (http://www.socialistparty.net/pub/pages/thesocialist028sep07.htm)

Ireland cannot compete with eastern European tax rates, unless we want to bankrupt the economy or impose higher taxes on spending and low to middle incomes. In addition, there are pressures piling up from the European Union to harmonize corporation tax to at least 20%

[The Grey Blur]

Cheers Cogface.

But what about people saying it creates jobs etc? What would be a socialist counter argument to that?

[black magick hustla]

Originally posted by Permanent [email protected] 27, 2007 06:01 pm
Cheers Cogface.

But what about people saying it creates jobs etc? What would be a socialist counter argument to that?
It does create jobs.

There is no short term solution for that, and hence the need for a world revolution. The bourgeosie owns the world, and therefore they come up with choiceless choices and disguise them as the only solutions. This is why they make us think that the only choice is to "let foreign investors to superexploit the workers". If foreign corporations were owned by the world proletariat, we wouldn't have to do such worthless choices.

Another example would be illegal immigration. Reactionaries make of them scapegoats, while in reality the only problem is the bourgeosie. It is true that immigrants do take over some sectors of the job market, but it is the capitalists themselves who give and remove jobs at will, not the immigrants. The problem is that there is a job market, while in reality, it shouldn't exist at all.

A lot of comrades make the same mistake by siding with ultra-reactionaries in their whole "anti-imperialist" charade. We are communists for a certain reason, because we see communism as an alternative.

[Demogorgon]

You can point out there are other ways to raise investment revenue that do not lead to a race to the bottom.

For example a country could tax revenue generating capital assets and use the money as a social investment fund. That way investment doesnt go abroad and doesn't force us to compensate on things like social welfare.

Obviously that isn't the long term solution, but it could certainly help in the time being. I can here the cries of "reformist" already, but we need to transition somehow.

[Dr Mindbender]

Originally posted by Permanent [email protected] 26, 2007 09:39 pm
You always hear people saying "we need to attract more foreign companies/investors, let's lower the corporate tax rate here." I disagree with this but where I live there is a pretty high rate of unemployment and people are desperate enough for the jobs that the shitty pay and exploitation is ignored.

What is a socialist critique of this?

And lol hi, I've been away for a while thinking about stuff and being lazy :lol:
I dont think it makes any difference, since any of the extra 'wealth' is unlikely to reach ordinary people. Quite the contrary, its this sort of backscratching that creates a precedence to the unions being walked all over.

[bolshevik butcher]

The point that this wealth doesn't trickle back to normal people is by and large true.

Beyond this however, most of the things that are set up through this investment is footloose industry. In Scotland many of the plants that set up in the "Silicon Glen" in the 1980s and 1990s have left. These are industries that pick up and leave as easily as they set up. The result is an economy based on states and regions bending over backwards and thrusting tax payers money, ie the money of working people, into the hands of corporations that can hold local communities to randsom by setting up on their own accord. We can't control what we don't own, capitalism can never provide full employment and when the workers in one area get too well off or demand more of the benefits of there work these companies can easily move off.